Can ex-business partners sue you if you have a dissolution of partnership and start a new company with a similar idea?
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Can ex-business partners sue you if you have a dissolution of partnership and start a new company with a similar idea?
We (4 of the partners and I) decided to break away from the other 2 partners and form a new company under a new name. The other 2 partners had performance issues. We never signed a partnership agreement, nor did we ever fully discuss any of split of equity. The new company will have a similar concept (as generic as opening a coffee shop) but under a different name and filing.
Asked on January 10, 2012 under Business Law, New York
Answers:
MARK ROSENBERG / Law Offices of Mark L. Rosenberg
Answered 12 years ago | Contributor
They may be able to claim that you had oral non-compete arrangements or that you used their proprietary information or customer lists improperly in your new business. If there were any ideas that they contributed to the company that you are now using, they could certainly file suit. You would be best advised to try to work something out with them to avoid a messy and expensive lawsuit.
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